Balance over time
Year by year
The formula
How it works
Work out the monthly payment on any fixed-rate loan from the amount borrowed, the interest rate and the term. The calculator also shows the total interest you will pay and how the balance falls over time.
FAQ
Why do I pay so much interest early on?
Interest is charged on the balance you still owe, which is highest at the start. So early payments are mostly interest, and only later do they chip away at the principal — a pattern called amortization.
How can I pay less interest overall?
A shorter term or a lower rate both cut the total interest, as do extra payments toward the principal. Even small overpayments early on save a surprising amount over the life of the loan.
What happens if I choose a longer term?
A longer term spreads the same principal over more payments, so each monthly payment is smaller — but you pay interest for longer, which usually raises the total interest paid overall.
Does this work for any type of loan?
Yes, as long as the loan is a fixed-rate, fully amortizing loan with equal monthly payments — this covers most personal loans, auto loans and student loans, though not interest-only or variable-rate products.
Why does my payment stay the same even as the balance changes?
Amortized loans are designed so the payment is fixed for the whole term; only the mix of interest and principal inside that payment shifts from mostly interest to mostly principal over time.
What if I make an extra lump-sum payment?
A lump sum applied to the principal reduces the balance immediately, which lowers the interest charged in every subsequent month and can shorten how long it takes to pay off the loan.
How does the interest rate affect the monthly payment?
Even a small change in rate can move the payment noticeably, especially on larger loans or longer terms, because interest compounds on the outstanding balance every single month.
About the loan calculator
This calculator finds the monthly payment on a fixed-rate loan, along with the total interest and the total you will repay. It works for any amortizing loan — personal loans, car finance, student debt and more — where you pay the same amount each month until the balance reaches zero. Seeing the payment and the total interest side by side makes it easy to compare offers and understand the real cost of borrowing.
How to use it
Enter the amount you want to borrow, the annual interest rate, and the term in years. The calculator shows the monthly payment, the total interest over the life of the loan, and the total amount repaid. For example, a $20,000 loan at 7% over 5 years costs about $396 a month, with roughly $3,760 of interest on top. Change the term or rate to see how they trade off against the monthly payment.
The formula
The monthly payment is , where is the loan amount, is the monthly interest rate (the annual rate divided by 12) and is the number of monthly payments. The formula spreads the loan and its interest evenly across every month so the payment stays constant. Total interest is simply the sum of all payments, , minus the amount you originally borrowed.
Where it is used
This is the core calculation behind almost every instalment loan. Lenders use it to set payments and disclose the cost of borrowing, and borrowers use it to budget and to shop around. The same maths powers mortgages, car loans, personal loans and equipment finance. Comparing the total interest, not just the monthly payment, is the key to spotting which loan is genuinely cheaper over its full term.